Three former officials with the Federal Home Loan Bank of Dallas have been charged in federal court with faking business travel to defraud the bank out of $1.2 million that paid for lavish trips that had nothing to do with work.

One of the officials is also accused of getting a contractor to file inflated invoices so the official could buy Christmas gifts, such as a "wine sommelier computer," for another banker.

The people charged in late August with making false statements are Terence C. Smith, former president and chief executive officer; Nancy B. Parker, former chief information officer; and Michael J. Sims, former chief financial officer.

The Dallas bank is part of a system formed by the federal government during the Great Depression to encourage mortgage lending, but it doesn't use taxpayer money. The Federal Home Loan Banks are owned by local lenders and provide much of the cash those lenders need to issue mortgages and other loans.

Prosecutors say Smith, Parker and Sims submitted expense reports related to conferences across the country that they never attended. Instead, over the span of five years ending in 2013, the trio burned bank funds on first-class airfare, luxury hotel rooms, expensive liquor and wine, limousines and concerts that served no business purpose, according to a federal complaint.

Smith, Parker and Sims — along with others acting under them — are accused of submitting more than 100 expense reports for 30-plus trips.

In two instances, prosecutors say, the executives traveled to Sonoma and Santa Barbara in California with plans to select accommodations for an off-site board meeting. But the trio instead indulged in private wine tours and fancy restaurants and left the business planning to other employees, according to the federal complaint.

The tab for those two trips came to more than $32,000, prosecutors say — all reimbursed to Smith, Parker and Sims.

Leaders of the Federal Home Loan Bank of Dallas traveled to Las Vegas several times between 2008 and 2013 and filed expense reports for tech conferences they did not attend, according to federal prosecutors.

(Gabriel Bouys/Agence France-Presse)

The trio also requested payment for unused vacation time even though they weren't working during bank-funded trips, according to the federal complaint. In the end, prosecutors say, the bank paid out $1.2 million in fraudulent travel expenses and vacation time compensation.

Parker faces separate allegations that she conspired with two people — including a contractor who later became an employee — to pad invoices and falsify check requests and purchase orders to embezzle more than $17,000 from the bank. The money was used to buy Christmas gifts for Smith: video and photography equipment and a "wine sommelier computer," according to the federal complaint.

Smith resigned in September 2013, followed by Parker that November. The Federal Home Loan Bank of Dallas said at the time that it would pay $390,000 to Smith and $105,000 to Parker as part of separation agreements, according to filings with the Securities and Exchange Commission.

Sims' departure from the bank came in May 2014 — with a $65,000 payout, records show.

The punishment for making a false statement to a Federal Home Loan Bank is up to 30 years in prison, along with a fine that can reach $1 million. Smith faces 11 such counts, Parker six and Sims three. The trio was also slapped with a charge of conspiracy in the case.